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Town finance committee recommends long-term planning, local sales tax

BRATTLEBORO—After a couple years of nonexistence, the Town Finance Committee has regrouped and developed recommendations for the annual Representative Town Meeting.

This move represents a new direction for the committee, said committee member Spoon Agave.

According to Agave, previous finance committees would scrutinize the town budget line by line and make suggestions.

The current committee is new, he said. The finance committee had dwindled away in past years because, as Agave understands it, members grew fatigued with constantly making recommendations that went ignored.

This year’s recommendations, however, shift to a long-view, Agave said.

“We see our role as purely advisory to the Representative Town Meeting members,” said committee member Bob Rottenberg.

Changes voted into the town charter last year expanded the finance committee’s role, said Rottenberg. Expectations for the committee shifted from bean counting to a committee willing to dig into town finances while looking ahead.

“We took that seriously,” said Rottenberg.

Providing good information

The finance committee has the authority to see anything related to the municipal or school budgets.

The committee hopes its annual report will provide the Town Meeting members with information to make strong financial decisions when casting their votes on March 24, said Rottenberg.

“Our approach is that it’s our job to give town meeting members the best information we can so they can make the best decisions they possibly can,” he said.

In that spirit, the committee focused its report on highlighting for members what big-picture issues to consider as they vote on this year’s budget.

Overall, the committee’s report advocates implementing policies.

The town already fulfills some of the committee’s recommendations, like having a reserve fund (which saved the town after Tropical Storm Irene, he said) but no formal policies exist, such as defining the fund’s minimum balance.

Recommendations

Policies can guide financial decisions and help track the progress of different financial goals, said Rottenberg.

The committee has put forward 12 recommendations, including viewing the current down economy as long-term and planning accordingly, addressing the town’s unfunded liability for health-care premiums, establishing an 8.3-percent debt-to-expenditures ratio, establishing a five-year projected budget, and developing a 25-year capital plan.

According to Rottenberg, the unfunded liability might or might not become an economic issue.

Federal government guidelines advise towns to set aside funds to cover the health-care premiums of early retired police and fire department employees under the age of 65. Town meeting members voted last year to set aside $30,000 for this purpose.

The town has not budgeted for the unfunded liability this year; rather, it has only budgeted for the actual costs, he said.

It’s not enough, said Rottenberg.

Numerous “ifs” surround the liability, like the number of early retirees in a given year, union-negotiated contracts, and how the state’s Green Mountain Care health insurance system develops.

Potentially, the town’s annual liability could jump from the current $100,000 to $600,000, said Rottenberg.

The committee also expressed support for enacting a 1-percent option tax in Brattleboro.

An option tax, championed by Selectboard Chair Dick DeGray for years, would add 1 percent to taxable goods and services.

The state collects the tax monies, takes a 30 percent as an administration fee, and returns 70 percent to the community in quarterly installments. Based on estimates discussed at a Jan. 5 special Selectboard meeting, Brattleboro’s cut of taxable sales from a 1-percent tax would total $663,797.

Wilmington voters approved implementing an option tax at their March 6 Annual Town Meeting.

Brattleboro’s population of about 12,000 jumps to about 40,000 during the daytime, said Rottenberg. This population jump comes with positives and negatives.

On the positive side, said Rottenberg, commuters and visitors support the economy, dropping coins in the parking meters and buying food and other items.

On the negative side, commuters also benefit from vital and expensive infrastructure and services like roads, street lights, police, and fire.

This scenario puts all the pressure on residents to pay for municipal infrastructure with taxes, he said.

A 1-percent option tax would spread the responsibility of financing Brattleboro across a wider population, Rottenberg explained.

There are no easy fixes in this economic climate, he said, “including kicking the can down the road, which seems like an easy fix, but that can only gets bigger as you kick it.”

Requiring training for municipal and school boards in economics and understanding budgets also makes the committee’s recommendation list.

Elected officials like the Selectboard approve the budget, yet aren’t required to possess financial knowledge. The committee recommends training, which would allow officials to understand the town’s financial temperature, he said.

The committee also supports developing long-term budgets to use as a framework for meeting members’ deliberation. Bouncing one year at a time “feels incomplete in our mind,” said Rottenberg.

On a personal note, Rottenberg would like the town and schools to develop a system for demonstrating how new expenses affect the tax rate.

Talking in terms of adding a penny to the tax rate, or in terms of a $12 million project, doesn’t translate into concrete terms for taxpayers, he said.

But telling a taxpayer that a new project or budget will raise their property tax bill by $100 per year helps them better evaluate or visualize the project’s expense or value.

The Finance Committee’s annual report is available as part of the annual Town Report. Copies are available from the town offices.

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Originally published in The Commons issue #143 (Wednesday, March 14, 2012).

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